Canadian Food Prices Expected to Increase up to 5% in 2021 Amid Economic Uncertainty

As the coronavirus pandemic continues to decimate the economy, forcing many businesses to adapt to evolving restrictions and social distancing measures, Canada’s food chain is about to face a wave of price increases that may create added strain on already weakened household incomes.

According to Canada’s Food Price Report, which is authored by Dalhousie University, University of Guelph, University of Saskatchewan and University of British Columbia, food prices are expected to increase anywhere between 3% to 5% in 2021, marking the biggest forecasted price increase on record. The report projects that vegetables, meat, and bakery goods will undergo some of the largest price hikes, meaning that a Canadian family of four could be spending an additional $695 on groceries, bringing the average annual food bill to around $13,907.

The coronavirus pandemic created various labour shortages and even shutdowns of major food processing plants, logistics interruptions, and delays at distribution centres, and given that the coronavirus pandemic isn’t going away anytime soon, the significant changes will likely linger into the next year. In order to meet the sudden surge in demand for food, many grocers reverted to e-commerce platforms to better abide by evolving pandemic restrictions, which in turn translated to higher food costs for consumers.

The pandemic crisis has also caused a shift in consumer behaviour, with an increasing number of Canadians buying their food needs from retailers rather than dining out. Prior to the pandemic, consumers were allocating 62% of their food budget on retail groceries, and spending the remainder on restaurants and food services. For much of this year however, it is estimated that Canadians now spend at least 74% of their food income at retailers, with just 26% being spent on restaurant dining.

Indeed, the recent decline in income allocation on food services is likely to persist into 2021, especially as restaurants continue to face obstacles as a result of the pandemic. Although that might suggest that Canadians will have more money in their overall food budget, even amid food price increases, that is not really going to be the case. Canada’s food inflation index has been surpassing the inflation index over the past 20 years, and that trend will continue for the foreseeable future.


Information for this briefing was found via the Canada’s Food Price Report 2021. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

Cargill CEO Abandons ‘Transitory’ Narrative, Warns Food Inflation Will Persist Into 2022

The CEO of Cargill has revoked his membership at team “transitory,” and has now conceded...

Thursday, November 18, 2021, 02:49:00 PM

Cost of Living Crisis: Should the Canadian Government Start Putting Price Controls on Groceries?

Canadian grocery prices have been a cause for concern as they continue to rise, affecting...

Thursday, August 3, 2023, 11:36:00 AM

Global Food Prices Near Record as Inflation Headaches Accelerate

Food costs around the world soared even closer to a record-high last month, creating a...

Saturday, December 4, 2021, 02:14:00 PM

Liberals’ Meeting With Grocery Execs Yields… Nothing

The top dogs of Canada’s major grocery chains were in Ottawa on Monday for a...

Tuesday, September 19, 2023, 07:34:00 AM

Maple Leaf CEO: Canadians Face ‘Terrible’ Food Insecurity Amid Rising Income Inequality, Inflation

Despite being an OECD country, it appears that Canada is facing a growing food insecurity...

Wednesday, May 25, 2022, 10:43:00 AM